Post by psychecc on Aug 13, 2008 8:52:02 GMT -6
This article has a lot of interesting stats on home foreclosures. Hagerty said on CNBC today that the average home price in Detroit is now about $20,000. Seems hard to believe, but that's what he said. Link to the full article follows.
Bank Stocks Drop Anew Amid Worry
Over Falling Home Prices
By JAMES R. HAGERTY and JONATHAN KARP
August 13, 2008; Page A1
Stuck with a growing glut of foreclosed houses, banks and investors are shedding them at increasingly steep losses, potentially adding to the banking industry's red ink this year.
Banks are selling foreclosed homes in some cases for less than half the price they fetched two or three years ago. The cuts are coming as the U.S. banking sector, slogging through its worst crisis in decades, bites the bullet out of fear that prices will keep falling.
Financial stocks fell sharply Tuesday, following J.P. Morgan Chase & Co.'s warning late Monday that it expects "a continued decline in U.S. housing prices." The dour assessment included a roughly $1.5 billion trading loss related to the largest U.S. bank's holdings of mortgage-backed securities.
J.P. Morgan shares fell 9.5% Tuesday, while Lehman Brothers Holdings Inc. and Wachovia Corp. fell about 12%. The declines marked a reversal in sentiment from recent optimism among some investors that the worst of the credit crunch might be over.
J.P. Morgan's warning was notable because the bank has been ahead of the curve over the past year in sounding the alarm about emerging troubles, such as mounting defaults in home-equity loans and credit cards....
One example of the deep price cuts on foreclosures: A 1,230-square-foot home in Corona, Calif., was sold by a unit of investment bank Credit Suisse in June for $198,000, down from $450,000 when the property sold in a regular transaction in December 2006....
A recent report from Barclays Capital estimates that there are 721,000 bank-owned homes nationwide, up from 112,000 two years ago. Barclays expects the total to rise 60% more before peaking in late 2009....
online.wsj.com/article/SB121858407824434917.html
Bank Stocks Drop Anew Amid Worry
Over Falling Home Prices
By JAMES R. HAGERTY and JONATHAN KARP
August 13, 2008; Page A1
Stuck with a growing glut of foreclosed houses, banks and investors are shedding them at increasingly steep losses, potentially adding to the banking industry's red ink this year.
Banks are selling foreclosed homes in some cases for less than half the price they fetched two or three years ago. The cuts are coming as the U.S. banking sector, slogging through its worst crisis in decades, bites the bullet out of fear that prices will keep falling.
Financial stocks fell sharply Tuesday, following J.P. Morgan Chase & Co.'s warning late Monday that it expects "a continued decline in U.S. housing prices." The dour assessment included a roughly $1.5 billion trading loss related to the largest U.S. bank's holdings of mortgage-backed securities.
J.P. Morgan shares fell 9.5% Tuesday, while Lehman Brothers Holdings Inc. and Wachovia Corp. fell about 12%. The declines marked a reversal in sentiment from recent optimism among some investors that the worst of the credit crunch might be over.
J.P. Morgan's warning was notable because the bank has been ahead of the curve over the past year in sounding the alarm about emerging troubles, such as mounting defaults in home-equity loans and credit cards....
One example of the deep price cuts on foreclosures: A 1,230-square-foot home in Corona, Calif., was sold by a unit of investment bank Credit Suisse in June for $198,000, down from $450,000 when the property sold in a regular transaction in December 2006....
A recent report from Barclays Capital estimates that there are 721,000 bank-owned homes nationwide, up from 112,000 two years ago. Barclays expects the total to rise 60% more before peaking in late 2009....
online.wsj.com/article/SB121858407824434917.html